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New ROI
While labor remains the top reason for automation, several other variables are entering into the ROI justification.

One of those is flexibility, says Bill Casey, president and chief operating officer for SI Systems. “We have manufacturing customers that want the ability to pick a solution up and take their investment with them if they need to expand or move their operations,” Casey says.

That’s leading to an emphasis on technologies like automatic guided vehicles and carts in manufacturing rather than traditional conveyor or overhead handling systems that were bolted to the floor. “If something changes, they can reprogram the AGV or cart, or if they move, they can load it onto the back of a truck and set it up at a new location,” adds Casey.

In fact, the market for AGVs has never been stronger, and not just among manufacturers. “There are whole new markets out there for AGV systems,” says Mark Longacre, marketing manager for JBT Corp. and chair of the Automatic Guided Vehicle Systems group at the Material Handling Industry of America. “The cost of the units has come down, software has made them easier and more intuitive to use in the warehouse, and they are capable of handling different scenarios than they did in the past.”

Longacre points out that in addition to transporting pallets or product from one workstation to another, AGVs routinely put away and retrieve pallets from drive-through and push back rack systems and even load trucks.

Flexible automation is also allowing end users to scale their solutions as needs change. “We’ve designed a fully automated robotic workstation with palletizing and stretch wrapping,” says System Logistics’ Coyne. “But we have a customer in Europe that implemented the system with manual palletizing to start, with the idea of installing a robot later this year.”

Similarly, TGW has developed a pallet-building solution that combines automation with manual palletizing. In this solution, a conveyor delivers a carton to a workstation at an ergonomic level. The operator, rather than a robot or software system, determines how best to build the pallet.

Once a layer is built, the operator steps on a footswitch that lowers the load for the next layer; at the same time, a stretch wrapper automatically wraps that layer. “The idea is to flush as much of the materials handling out of the system as makes sense, while still having the flexibility to easily build a pallet in a certain way,” says Strayhorn.
Taking a holistic view
As is the case with Office Depot, companies that own their own stores and control their distribution and transportation processes are justifying automation by taking a holistic view of the supply chain, starting with what happens in the store.

“In Europe, we are implementing systems in the retail channel where the focus is on improving the materials handling in the distribution center to reduce the cost of operating in the store,” says Strayhorn. In the past, companies have implemented systems that build aisle-ready pallets, meaning that all of the items on a pallet will be putaway in a specific aisle in a specific store. The most sophisticated examples can design a pallet so that the top layer will be stored on one end of the shelf with the bottom layer on the other end of the shelf.

Strayhorn is now seeing systems that take that concept one step further, to loading containers—and not just pallets—with product in the order it will go on the shelf. “We’ve developed a system that picks women’s T-shirts by size and places them in store-ready cartons in the order that they’ll sit on the shelf in the women’s department,” says Strayhorn. “The store associate simply opens up a tote, puts the cartons on the counter and they’re done.”

Likewise, one of Witron’s customers in Southern California justified the cost of a highly automated system on transportation savings. “The system builds a pallet in an aisle-ready fashion which ends up saving them about half a person per store over several hundred stores in their region,” says O’Farrell. “But the automation is able to build a load that is taller than the load they can build manually. That’s generating a 20 percent to 40 percent savings on transportation because they’re getting more cube on the truck.”
Targeted automation
The last trend might be something we’ll call targeted automation: Embracing automation where it makes sense and embracing smart manual processes where they make sense.

“One of our rules of automation is that an end user should take a long hard look at a lean approach to operating before they automate,” says Strahan. “You don’t automate more than you need or automate things that shouldn’t be automated at all.” Instead of spending $20 million to automate 100 percent of your storage, maybe you can spend $5 million to automate 20 percent of your storage and still get productivity gains from smart traditional processes.

CVS is a proponent of this approach, according to Intelligrated’s McKnight. Over the years, CVS has built some of the most highly automated distribution centers in North America. Yet, Intelligrated is working on a project with CVS that involves a traditional wide-aisle, low-bay distribution system.

The takeaway: “From working with automation, CVS has learned that it’s important to find the right niche,” says McKnight. “They will put in lights out automation where it makes sense, but they won’t hesitate to put in a traditional solution enhanced by limited automation if that makes sense.”

To that end, materials handling companies are developing flexible and scalable solutions that allow their customers to do just that type of targeted automation. One example is a mobile A-frame developed by SI Systems. “It’s designed for the warehouse with anywhere from 16 to 64 fast-moving products and spikes in demand that create bottlenecks,” says Casey. “You can move the A-frame into place, lock it down and do order fulfillment of any fast-moving product that has stackability characteristics. If your demand picks up, you add another unit.”

Likewise, Swisslog has developed a high-density storage solution that uses bins for storage and robotic extractors that travel on a grid above the bins. “If a user needs to add more throughput, they can simply add more bins or more robots,” says Markus Schmidt, senior vice president of Swisslog. “You can start small and easily expand.”

The next frontier
Over the last several years, tremendous achievements have been made in automated solutions for case picking and palletizing that use automated storage, conveyor, and sortation systems as well as robotic palletizing.

The next frontier is piece picking. It is, after all, the most labor intensive activity in a DC. It is also the process with the most opportunity for error. “Piece picking is what we’re all trying to conquer,” says TGW’s Strayhorn. “There are solutions out there, but I don’t know that any of us has solved the problem to the satisfaction of our end users.”

The most common approach to automating piece picking is a goods-to-person solution that uses some type of automated storage and conveyor to deliver the products to be picked to an ergonomic workstation. There, lights, voice or images on a display screen will automatically tell the associate how many items to pick and where to place them. That type of solution is most often used to aggregate a high number of slow-moving stock keeping units into space saving storage and eliminate walking on the part of the associate.

Witron has created a variation of that solution for operations that include case and piece picking in the same order. The systems use an AS/RS to automatically replenish a pick face; pick-to-light to optimize piece picking; and software to marry the individual items picked to a carton or tote with full case picks for that order at the palletizer.

Other solution providers, such as Axium, have developed robotic piece picking solutions that completely automate the piece picking process in applications that include a consistent product.
Developments like these, combined with the sophistication of software for automation, could lead to a brighter future for materials handling automation. “I think the most important development is that the industry and end users are more in tune with creating a solution than selling equipment,” says Strahan. “We’re seeing more people who understand automation and applications than in the past.”

About the Author

Bob TrebilcockEditor at Large

Bob Trebilcock, executive editor, has covered materials handling, technology and supply chain topics for Modern Materials Handling since 1984. A graduate of Bowling Green State University, Trebilcock lives in Keene, NH. He can be reached at 603-357-0484 and .(JavaScript must be enabled to view this email address)

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